Stora Enso closes unprofitable softwood pulp production in Sweden

Stora Enso closes unprofitable softwood pulp production in Sweden: the end of an era or forced evolution?

    The European pulp market continues to storm, and one of its flagships, the Finnish-Swedish giant Stora Enso, has chosen the path of rigorous optimization. The company plans to close the production of softwood pulp at the plant in Skutskar, Sweden ("L3" or "fibroline No. 3") in the third or fourth quarter of 2026. This decision is not a local failure, but a symptom of deep structural changes in the global pulp and paper industry, where traditional segments are giving way to new, more marginal ones, and production centers are shifting from Europe to other regions of the world.

The long-lived plant goes down in history

    The Skutskar plant is a large enterprise with an annual capacity of 515,000 tons, founded back in 1895. The production shutdown will deprive about 80 employees of their jobs.

Facts and figures:

    Timo Tidenberg, head of Skutskar's division, admitted that management had considered all possible options for saving the troika, but none were capable of ensuring long-term competitiveness.

Why are they closing? The three main reasons are

    The situation clearly illustrates the problems faced by the entire European forestry industry.

1. Falling demand
    The consumption of softwood pulp in Europe has been steadily decreasing since 2023. Traditional paper industries (newspaper, offset, and office paper) are shrinking or closing down, giving way to digital media. Following the demand, prices also collapsed, making the production of softwood pulp in Europe economically unprofitable.

2. Rising costs
    Prices for raw wood in Sweden, energy (especially after the energy crisis in Europe) and logistics, on the contrary, continue to rise. European factories are caught between falling product prices and rising costs of raw materials and energy.

3. Global shift in emphasis
    Traditional paper production is giving way to more modern packaging and hygienic materials. The world leaders in the pulp industry (Brazil, Indonesia, China) are increasing their capacity to produce cheap hardwood pulp from fast-growing species (eucalyptus, acacia). European coniferous pulp from slow-growing northern pine and spruce loses in price.

Context: global restructuring of Stora Enso

    The decision to shut down production in Skutskar is not an isolated event, but the next stage of a large—scale restructuring that Stora Enso is carrying out around the world.

Over the past few years, the company has:

•     - Stopped pulp production at the Sunila plant in Finland, closing it permanently at the end of 2023.
•     - Closed the Näpi sawmill in Estonia in the same year 2023.
•     - Stopped one of the paper machines at the plant in Anyalankoski (Finland) back in November 2023.

Stora Enso's Russian footprint is also part of the global picture. The company completely left the Russian market in March 2022 (after the outbreak of the war in Ukraine), and then transferred its sawmills Setnovo in the Novgorod region and Settles in Karelia to local management.

Indirect effect: 

    Stora Enso's withdrawal from Russia has led to a shortage of wood in neighboring Finland, which is now forced to buy more raw materials from Sweden, creating a counter shortage there and raising prices for Swedish raw materials — another blow to the profitability of Swedish factories.

A new strategy: betting on puff pulp and the future

    Instead of fighting for the past, Stora Enso is betting on the future, concentrating its efforts on the two remaining lines of the Skutskar plant. The company plans to increase the production of puff cellulose, a special fiber used for the manufacture of diapers, feminine hygiene products and medical products.

Why is fluffy cellulose?

•     - This is a high-margin segment that remains profitable even in times of crisis.
•     - The demand for it is stable and does not depend on cyclical fluctuations in construction or advertising (unlike lumber or office paper).
•     Demographic trends (population aging, rising birth rates in developing countries) support long-term demand.

    Moreover, the company does not exclude further expansion of this area in the future.

Importance for the global market

    The closure of softwood pulp production in Skutskar is not just news about one plant. This is a symptom of global shifts.

1. Europe is losing competitiveness in mass segments
    High costs of energy, raw materials and labor make Europe uncompetitive in the production of "marketable" softwood pulp. Production is moving to South America (Brazil, Uruguay, Chile) and Southeast Asia (Indonesia), where fast-growing rocks produce cheaper fiber.

2. Transition to niche and specialty products
    European producers survive only by moving into high-value-added segments that are inaccessible to mass producers from the tropics. Puff pulp, special grades for the medical and hygiene industries, unique breeds for designer paper — that's where Europe is heading.

3. Pressure on Russian and Finnish manufacturers
    The withdrawal of Stora Enso from Russia and the closure of facilities in Sweden and Finland are reducing the overall supply of softwood pulp in Europe. For Russian manufacturers (for example, Ilim, Arkhangelsk Pulp and Paper Mill), this may mean the opportunity to increase exports to Europe (if sanctions restrictions do not interfere) or, conversely, increased competition in Asian markets, where the released European products will be redirected.

4. A signal for investment
    Investors in the forestry industry should take into account that investments in the mass production of softwood pulp in Europe today are a high risk. And investments in special types of cellulose (puff, dissolved cellulose for viscose, nanocellulose) can be justified.

Key indicators of Stora Enso restructuring:

Conclusions

    Stora Enso closes the unprofitable production of softwood pulp in Sweden. This is sad news for the oldest factory, for 80 families and for the European industry. But it is also an inevitable evolution. The world is changing, and the forestry industry is changing with it.

    Europe can no longer produce cheap pulp. But it can produce high-quality, special, high-tech products for which customers are willing to pay more. Puff cellulose, medical materials, bioplastics, and composites are the future of Stora Enso and other European giants.

    For the global market, this means further polarization: mass pulp will be produced in South America and Asia, while Europe and North America will focus on innovation and niches. The only question is whether European companies will be able to rebuild quickly enough before they finally lose their competitiveness.

Tags: #StoraEnso #cellulose #coniferous cellulose #Sweden #Scooter #restructuring #fluffy cellulose #global market #forestry

Edited Moderator (May 31, 2026 19:08:22)